Oppenheimer analysts even remarked this morning in a note that they’ve been waiting a decade for an “encore” to a failed Staples/Office Depot deal.

But with sales struggling at both retailers, cost savings are going to be the driver of this deal. Analyst estimates are diverse but range between annual savings of $300 million and as much as $700 million, with three analysts this morning consolidating around $500 million.

To put that into context, for the full year of 2011 the combined revenue for the two would have been $18.6 billion and their combined costs-of-goods sold would have been $13.4 billion.

Bernstein analysts on Friday, before word broke about the talks, were already advocating that a deal would help the entire industry. Today they reiterated that a deal would save the two up to $700 million a year, meaning total potential savings would be between $2.5 billion and $4 billion, “dwarfing the combined market cap of the two stocks today.”

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About Deal Journal

Deal Journal is an up-to-the-minute take on the deals and deal makers that shape the landscape of Wall Street, including mergers and acquisitions, capital-raising, private equity and bankruptcy. In short, wherever money changes hands. Deal Journal is updated throughout each trading day with exclusive commentary, analysis, data, news flashes and profiles. The Wall Street Journal’s David Benoit is the lead writer, with contributions from other Journal reporters and editors. Send news items, comments and questions to deals@wsj.com.